In the working-class neighborhoods around Tehran’s Imam Hussein Square, the side streets are filled with second-hand stores and small repair shops that refurbish all kinds of household items. But with nothing else to do, most of the shop owners sit idle in front of their shops.
A 60-year-old man named Abbas and his 32-year-old son, Asgar, reclined on two second-hand imitation brocade armchairs they were selling. Asked about their business, Abbas, who declined to give his last name for fear of attracting government attention, looked incredulous.
“Just look at the situation on the street,” he said. “Business is terrible. There are no customers, people are in bad financial situations right now, they don’t have money.”
Over the years, tough U.S. sanctions have led to chronic inflation in Iran, exacerbated by economic mismanagement and corruption, with Iranians increasingly feeling trapped in an economic downturn.
During six days of interviews in the Iranian capital, nearly everyone described a common feeling: The economy is bad; people are window-shopping instead of buying things; machines in factories are getting so expensive that people have to tinker with them; mutton is so expensive that people are starting to eat lentils instead.
Even in Tehran’s upscale Pasdaran neighborhood, where chic cafes serve croissants and cappuccinos and grand Art Deco apartment buildings line the avenues, most Iranians, regardless of their political views, have one demand of the next president to be chosen in a runoff on Friday: fix the economy.
When asked how business was going, Roya, 25, who runs a small cosmetics store in a bazaar in northern Tehran, responded with a single word: “Not that good.”
Yet, with shelves stocked with moisturizers, mascaras, blushes, and serums, the store seemed to be doing brisk business. So what was missing?
“Everything is becoming less and less: there are fewer customers, they buy less, and imported cosmetics are coming from fewer sources,” she said, speaking on condition of anonymity for fear of retaliation from her boss or the government.
She said French and German brands favoured by high-end Iranians had become too expensive and only the super-rich could afford them.
There is also a lack of cars on Iran’s congested streets. Some are old products made in joint ventures with European and Japanese manufacturers after sanctions were eased, or are domestically produced knockoffs.
When President Donald J. Trump unilaterally withdrew the United States from the 2015 nuclear deal negotiated between Iran and Western powers and reimposed sanctions on banking and oil sales, much of the foreign investment disappeared with it.
Meanwhile, the lure of wealth remains palpable. High-end consumer goods, including iPhones and designer clothes; Italian kitchenware and the latest German lamps, are sold in malls and boutiques in northern Tehran. Construction projects are underway in many neighborhoods. And despite sanctions, the government has managed to expand its sophisticated uranium enrichment program.
Iranians’ sense that their economic situation has worsened stems partly from the contrast with the period between the 1990s and 2010, when the middle class could count on seeing their real incomes rise every year.
Since then, Iranians’ incomes and assets have been weighed down by inflation and a weak currency, with the exception of a small elite of well-connected clerics and military personnel, as well as industrialists, developers and top professionals at the top of the economy.
In 2000, the Iranian rial was worth about 8,000 to the dollar, but now the official exchange rate is about 42,000, while the street exchange rate is closer to 60,000. Inflation has leveled off, but is still rising. About 37% per yearAccording to the International Monetary Fund, this growth rate is unimaginable in the United States or Europe.
Despite severe headwinds, the country’s economy has maintained annual growth of about 1.7% since 2010, when the Obama administration tightened sanctions over Iran’s nuclear program. Economists say the growth is largely due to increased oil production and sales, mainly A growing market According to data from the Congressional Research Service.
“Sanctions have cast a shadow over the Iranian economy but have not caused its collapse,” said Esfandyar Batmanghelij, head of the Exchange and Bazaar Foundation, an economic think tank focused on the Middle East and Central Asia. But he added that the meagre growth achieved despite the sanctions was of little comfort to Iranians who were painfully aware of “how much opportunity is left.”
The currency has depreciated so much that when foreigners exchange $100 for Iranian rials, they receive stacks of bills so large and heavy that they must be carried in briefcases or backpacks. The government has begun introducing a new currency, the toman, which is officially equivalent to 10 rials.
“Only those who have money can live comfortably,” said Vahid Arafati, 36, as he sat on the cobblestone square outside a small cafe, drinking espresso and freshly squeezed carrot juice with friends.
While the middle class talks about the cost of housing and how young people are delaying marriage because they can’t afford to buy a home, the situation is far worse for less fortunate Iranians who live on a meagre monthly salary and spend an average of 70 percent of their income on rent.
During the presidential election rally at the Lourezadeh mosque in a less affluent neighborhood in southern Tehran last Friday, many spoke angrily about U.S. sanctions and what they are doing to Iran, but also pleaded with the next Iranian president to hear their pain.
“I hope the president will listen to my troubles,” said Mina, 62, who like most women is dressed head to toe in a black burqa. “I live in a basement, I have children, they can’t find jobs, I need surgery, but I came to vote anyway,” she said, frowning as she walked to the ballot box.
Landlords have no limits on rent increases, leaving people like Mina in constant fear of being displaced because they can’t afford the rent.
Next to her, Fatima, a 48-year-old housewife, was furious, especially about U.S. sanctions, which she blames for Iran’s economic problems. “These problems and sanctions are caused by our enemies, but they will not succeed,” she said. “We will stab our enemies in the eye.”
Abbas, the chair salesman, sees the economy differently. “You see, Iran is a rich country, but this wealth is not going to the people,” he said. “I don’t know where it goes, I’m not the government, maybe they know where it goes, but every year it gets worse.”
“No president will help,” he added. “When the last president came to power three years ago, a kilogram of meat cost 100,000 tomams. Now it’s 600,000 tomams.”
A few shops away, in the refurbishment workshop of the chairs sold by Abbas, the mood was even more somber.
In the back, two workers sweated on mats they were renovating, working quickly and without saying a word. They were educated, they said, but years of dwindling fortunes had left their families unable to make ends meet, and they were forced to take whatever work they could find.
The third man, Mohammad Reza Moharran Zahere, 36, said he had graduated from high school and was going to college to become a pilot, but his father’s carpet shop was facing bankruptcy, so he gave up his studies to help.
Now he says his only hope is to emigrate to Germany.
“Many of my friends have left the country. It’s hard to immigrate legally, but what other options do we have?” he said. “I’m paid by the piece, about $220 a month, and $180 goes to rent. I’m single, how can I get married? Iran is not a good place to make money.”
Seddighe Boroumand, 62, a school cleaner who is less than four feet tall, was close to tears as she described how her inability to afford anything but shelter and food had severely affected her life.
“My daughter died eight months ago because I had no money to buy her medicine,” Ms. Borumand said. “She had lung problems and couldn’t breathe. I watched her gasp. My first son also died of a heart attack. He had a child and I paid to raise his child.”
“My third son is a conscript, but he has some physical disabilities and we will take care of him,” she added, nodding to her husband who works at the same school.
“We ask politicians to put an end to this suffering.”
